Exxon Mo­bil must al­low cli­mate change vote: SEC

The Pak Banker - - COMPANIES/BOSS -

The U.S. Se­cu­ri­ties and Ex­change Com­mis­sion has ruled Exxon Mo­bil Corp must in­clude a cli­mate change res­o­lu­tion on its an­nual share­holder proxy, a de­feat for the world's largest pub­licly traded oil pro­ducer, which had ar­gued it al­ready pro­vides ad­e­quate car­bon dis­clo­sures.

In a Tues­day let­ter to Exxon seen by Reuters, the SEC said the oil pro­ducer can­not keep a pro­posal spear­headed by New York state's comp­trol­ler from a full share­holder vote at the com­pany's an­nual meet­ing in May.

If ap­proved, the pro­posal would force Exxon to out­line spe­cific risks that cli­mate change or leg­is­la­tion de­signed to curb it could pose to its abil­ity to op­er­ate prof­itably.

Exxon had ar­gued that the pro­posal was vague and that it al­ready pub­lishes car­bon-re­lated in­for­ma­tion for share­hold­ers, in­clud­ing a 2014 re­port on its web­site en­ti­tled, "En­ergy and Car­bon - Manag­ing the Risks." The SEC found those re­ports do not go far enough. "It does not ap­pear that Exxon Mo­bil's pub­lic dis­clo­sures com­pare fa­vor­ably with the guide­lines of the pro­posal," Justin Kis­ner, an at­tor­ney-ad­viser with the SEC, wrote to the oil pro­ducer.

Exxon Mo­bil de­clined to com­ment on the SEC's rul­ing. "We'll be com­mu­ni­cat­ing the board's rec­om­men­da­tions on share­holder res­o­lu­tions through the proxy doc­u­ment next month," Exxon spokesman Alan Jef­fers said.

It is not un­com­mon for com­pa­nies to give share­hold­ers their opinion on proxy votes. It is un­clear whether the pro­posal, though, has much chance of suc­cess. Exxon share­hold­ers have never ap­proved a cli­mate change-re­lated pro­posal, and last year they re­jected by 79 per­cent a re­quest that a cli­mate ex­pert be ap­pointed to the com­pany's board.

Nev­er­the­less, New York state Comp­trol­ler Thomas DiNapoli, who over­sees the state's $178.3 bil­lion pen­sion fund, called the SEC's de­ci­sion a "ma­jor vic­tory" for share­hold­ers.

"In­vestors need to know if Exxon Mo­bil is tak­ing nec­es­sary steps to pre­pare for a lower car­bon fu­ture, par­tic­u­larly now in the wake of the Paris agree­ment," DiNapoli said in a state­ment, re­fer­ring to an agree­ment last fall by 195 coun­tries to rein in ris­ing emis­sions that have been blamed for global warm­ing.

En­vi­ron­men­tal­ists cheered

the SEC's de­ci­sion. "The SEC has re­jected Exxon's at­tempt to si­lence in­vestors' con­cerns about the very real fi­nan­cial risks as­so­ci­ated with cli­mate change," said Shanna Cleve­land of Ceres, a non­profit group that tracks en­vi­ron­men­tal records of pub­lic com­pa­nies.

DiNapoli was joined in the SEC fil­ing by the Church of Eng­land, the Ver­mont State Em­ploy­ees' Re­tire­ment Sys­tem, the Univer­sity of Cal­i­for­nia Re­tire­ment Plan and the Brain­erd Foun­da­tion.

The rul­ing from the SEC comes as Exxon fights other car­bon-re­lated bat­tles, in­clud­ing an in­quiry by New York At­tor­ney General Eric Sch­nei­der­man into whether the com­pany mis­led the pub­lic and share­hold­ers about the risks of cli­mate change. Exxon has hired a star at­tor­ney, Theodore V. Wells, Jr. as it fights the in­ves­ti­ga­tion from Sch­nei­der­man, who sub­poe­naed the com­pany for a trove of records, emails and other doc­u­men­ta­tion.

Sch­nei­der­man has ag­gres­sively fought com­pa­nies on cli­mate is­sues for years. Last fall he set­tled an eight-year in­ves­ti­ga­tion with coal pro­ducer Peabody En­ergy to amend its cli­mate change dis­clo­sures so that they would be more ro­bust.

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